Federal Circuit Reverses
Finding Of Indefiniteness
In Chicago
Board Options Exchange, Inc. v. Int’l Securities Exchange, LLC (Appeal
No. 2013-1326), the Federal Circuit reversed a district court’s finding of
indefiniteness.
The
patent-in-suit generally discloses an “automated exchange” for trading
financial instruments. In 2011, CBOE moved for summary judgment that, it
lacked an “automated exchange.” The district court denied the motion. On
appeal, the Federal Circuit construed the term “automated exchange” to mean
“a system for executing trades of financial instruments that is fully
computerized, such that it does not include matching or allocating through
the use of open-outcry.” The Federal
Circuit also construed “matching” as “identifying a counterpart order or
quotation for an incoming order or quotation” and that “matching” and
“allocating” are distinct processes. The case was then remanded for further proceedings.
On
remand, the district court found that claim 2, a computer implemented
means-plus-function claim, was indefinite because the specification failed to
disclose an algorithm for performing the recited function. Claim 2 included a limitation to “a means
for matching” orders “on a pro rata basis.” The district court found the claim indefinite because the
specification failed to disclose “a step-by-step algorithm for performing the
claimed function.”
On
appeal, the Federal Circuit found claim 2 to be not indefinite because the specification
discloses an algorithm for matching the remaining orders on a pro rata basis.
Specifically, the Federal Circuit held that “matching” itself is not
indefinite, having been construed by this court as “identifying a counterpart
order or quotation for an incoming order or quotation.” The Federal Circuit further held that the
specification explains that orders are matched in proportion to the size of
the order requested by the professional, and that, if the order sizes are
equal for two professionals, the professional who placed the first order,
gets matched first. Thus, the Court reasoned that a person of ordinary skill
in the art would understand the algorithmic structure for performing the
claimed function.
Thus,
the Federal Circuit held that the district court erred in finding that there
was clear and convincing evidence that the specification did not disclose
sufficient structure such that a person of ordinary skill in the art would
know how to match on a pro rata basis. Accordingly, the Federal Circuit reversed the district court’s decision
that claim 2 was indefinite.
Federal
Circuit Vacates District Court’s Denial Of Preliminary Injunction
In Trebro
Mfg., Inc. v. FireFly Equipment, (Appeal No. 2013-1437), the Federal
Circuit vacated a district court’s denial of a preliminary injunction against
FireFly. The patent covered sod-harvesting vehicles. Although Trebro was not practicing the
patent, the parties were competitors selling competing products. Trebro
argued it would lose market share, customers, and ultimately employees
through lay-offs if FireFly continued to sell the allegedly infringing
product.
The
district court found no substantial likelihood of success on the merits for
failing to meet a claim limitation, and also found a substantial question as
to validity, stating that “[t]here is a controversy that the feature of
raising the horizontal conveyor towards the sod carrier was not a novel or
non-obvious feature.” The district court stated that “[t]his feature was
known in the sod
harvesting
industry, and was also known by the inventors and assignee.”
The
district court found no irreparable harm, dismissing Trebro’s evidence as
speculative and that the theoretical losses could be compensated monetarily.
On appeal, The Federal Circuit
held the evidence showed that an infringing product would inflict “a real
non-speculative harm on Trebro.” FireFly was a new entrant and Trebro’s only
direct competitor. Although Trebro could estimate price, profit, and yearly
sales for harvesters, that did not automatically mean money damages were
adequate. The record indicated Trebro would be unlikely to recover a loss of
market share and customers. Thus, the
Federal Circuit held “the district court abused its discretion in denying the
preliminary injunction based on a record that strongly suggests both a
likelihood of success on the merits and a likelihood of irreparable
harm.” The case was then vacated and
remanded.
Federal Circuit Vacates Decision That Patent
Was Not Invalid For Obviousness-Type Double Patenting
In Gilead Sciences, Inc. v.
Natco Pharma Ltd. (Appeal No. 2013-1418), the Federal Circuit vacated a
district court decision that Gilead’s ‘483 patent was not invalid. Natco
argued the ’483 patent was invalid for obviousness-type double patenting over
Gilead’s ‘375 patent. The two patents listed
the same inventors and included a similar written description, but claimed
different priority dates. The district court held that the ’375 patent could
not serve as a double patenting reference because it issued after the ’483
patent.
On appeal, the Federal Circuit
stated that following diagram illustrates the relevant dates for each patent,
and how, because of different priority
dates, the two patents have
different expiration dates:
The
Federal Circuit held that a patent that issues after but
expires before another patent can qualify as a double patenting reference for
that other patent. Thus, the
district court erred in excluding the ’375 patent as a potential double
patenting reference for the ’483 patent and the case was vacated
and remanded for
further
proceedings.
Federal Circuit Reverses Summary Judgment Of No Damages And
Affirms Denial Of An Injunction For Infringement Of An SEP
In Apple Inc. v. Motorola, Inc. (Appeal
Nos. 2012-1548), the Federal Circuit reversed in part and affirmed in part
the district court’s claim construction.
The district court granted
summary judgment of non-infringement with respect to certain claims and
excluded the vast majority of both parties’ damages expert evidence for the
remaining claims. With little expert evidence deemed admissible, the court
granted summary judgment that neither side was entitled to any damages or an
injunction. Despite infringement being
assumed, the district court dismissed all claims with prejudice before trial.
On appeal, the Federal Circuit
reversed the district court’s grant of summary judgment of no damages for
infringement of Apple’s patents, vacated the district
court’s grant of summary
judgment regarding Apple’s request for an injunction, and affirmed the
district court’s ruling that Motorola is not entitled to an injunction for
infringement of the FRAND-committed ‘898 patent.
Regarding Apple's and
Motorola’s experts’ testimony, the district court erroneously “questioned the
factual underpinnings and correctness” rather than the reliability of
principles and methods and the sufficiency of facts. Under Daubert and the
Rules of Evidence, a district court should exclude expert testimony only when
based on “unreliable principles or methods, or legally insufficient facts and
data.” It was the duty of the jury, not the judge, “to weigh facts, evaluate
the correctness of conclusions, impose its own preferred methodology, or
judge credibility.”
Regarding the district court’s
ruling that Motorola is not entitled to an injunction, the Federal Circuit
noted that to the extent that the district court applied a per se rule that injunctions are
unavailable for SEPs, it erred. The
Federal Circuit stated that a patentee subject to FRAND commitments may have
difficulty establishing irreparable harm, but an injunction may be justified
where an infringer unilaterally refuses a FRAND royalty or unreasonably
delays negotiations to the same effect. “To be clear, this does not mean that an alleged infringer’s refusal
to accept any license offer necessarily justifies issuing an injunction.”
The Federal Circuit then held
that the district court correctly found that Motorola is not entitled to an
injunction for infringement of the ‘898 patent. Motorola’s FRAND commitments,
which have yielded many license agreements encompassing the ‘898 patent,
strongly suggest that money damages are adequate to fully compensate Motorola
for any infringement. Similarly, Motorola has not demonstrated that Apple’s
infringement has caused it irreparable harm. Considering the large number of
industry participants that are already using the system claimed in the ‘898
patent, including competitors, Motorola has not provided any evidence that
adding one more user would create such harm. Again, Motorola has agreed to
add as many market participants as are willing to pay a FRAND royalty.
Accordingly, the Federal Circuit affirmed the district court’s grant of
summary judgment that Motorola is not entitled to an injunction for
infringement of the ‘898 patent. |
